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December 13, 2007 at 7:33 PM #116715December 13, 2007 at 7:33 PM #116729CoronitaParticipant
NYCLurker or PatientRenter,
I'm curious. Have you ever met someone in their 70ies now who have remotely complained about contributing too much on a retirement account and are now getting taxed up the ars now? Just curious. Only reason why some people my parents are friends nearing this age have some of this concern.
December 13, 2007 at 7:57 PM #116560drunkleParticipantflu:
1) i’m a programmer/analyst type with a background in civil engineering.
2) i don’t have any sort of retirement alternative. which is why i didn’t have any response for your query. i do have a paltry 401 that i quit contributing to after my employer quit. i’m also simply saving cash, ostenstibly for a home purchase. beyond that, my retirement goals are 1) have children who are smart, educated, skilled and wont dump me into a gutter (the 401c plan; have 401 children) 2) be independently wealthy either through size of bankroll or moving to singapore. or 3) die young. 65 is pretty young these days…
December 13, 2007 at 7:57 PM #116691drunkleParticipantflu:
1) i’m a programmer/analyst type with a background in civil engineering.
2) i don’t have any sort of retirement alternative. which is why i didn’t have any response for your query. i do have a paltry 401 that i quit contributing to after my employer quit. i’m also simply saving cash, ostenstibly for a home purchase. beyond that, my retirement goals are 1) have children who are smart, educated, skilled and wont dump me into a gutter (the 401c plan; have 401 children) 2) be independently wealthy either through size of bankroll or moving to singapore. or 3) die young. 65 is pretty young these days…
December 13, 2007 at 7:57 PM #116722drunkleParticipantflu:
1) i’m a programmer/analyst type with a background in civil engineering.
2) i don’t have any sort of retirement alternative. which is why i didn’t have any response for your query. i do have a paltry 401 that i quit contributing to after my employer quit. i’m also simply saving cash, ostenstibly for a home purchase. beyond that, my retirement goals are 1) have children who are smart, educated, skilled and wont dump me into a gutter (the 401c plan; have 401 children) 2) be independently wealthy either through size of bankroll or moving to singapore. or 3) die young. 65 is pretty young these days…
December 13, 2007 at 7:57 PM #116765drunkleParticipantflu:
1) i’m a programmer/analyst type with a background in civil engineering.
2) i don’t have any sort of retirement alternative. which is why i didn’t have any response for your query. i do have a paltry 401 that i quit contributing to after my employer quit. i’m also simply saving cash, ostenstibly for a home purchase. beyond that, my retirement goals are 1) have children who are smart, educated, skilled and wont dump me into a gutter (the 401c plan; have 401 children) 2) be independently wealthy either through size of bankroll or moving to singapore. or 3) die young. 65 is pretty young these days…
December 13, 2007 at 7:57 PM #116780drunkleParticipantflu:
1) i’m a programmer/analyst type with a background in civil engineering.
2) i don’t have any sort of retirement alternative. which is why i didn’t have any response for your query. i do have a paltry 401 that i quit contributing to after my employer quit. i’m also simply saving cash, ostenstibly for a home purchase. beyond that, my retirement goals are 1) have children who are smart, educated, skilled and wont dump me into a gutter (the 401c plan; have 401 children) 2) be independently wealthy either through size of bankroll or moving to singapore. or 3) die young. 65 is pretty young these days…
December 13, 2007 at 8:21 PM #116573patientrenterParticipant“Have you ever met someone in their 70ies now who have remotely complained about contributing too much on a retirement account and are now getting taxed up the ars now? Just curious.”
flu, no, I haven’t met anyone in the situation you describe. (I’m in no way claiming that they don’t exist. I just don’t know any.) If a person has accumulated money in a tax-deferred retirement accounts for 20 years, then I would think they’d have done very well compared to someone who had paid taxes every year on bonds or many mutual funds (with high turnover and/or high income).
Perhaps your parents’ friends would have done much better to pay taxes on their source income and invest in funds that were taxed annually. But I wonder if their current opinions are biased by the immediate negative of current taxes on past gains, and they are losing sight of the large tax benefits they reaped years ago.
This reminds me of homeowners who bought in 1987 or 1996, whose homes went up by $1 million, and who complain sincerely about the financial burden of their home, because the prices have gone down by $100,000 in the last year. All they see is the $100,000 loss, forgetting the prior $1 million gain and the huge net benefit.
Patient renter in OC
December 13, 2007 at 8:21 PM #116706patientrenterParticipant“Have you ever met someone in their 70ies now who have remotely complained about contributing too much on a retirement account and are now getting taxed up the ars now? Just curious.”
flu, no, I haven’t met anyone in the situation you describe. (I’m in no way claiming that they don’t exist. I just don’t know any.) If a person has accumulated money in a tax-deferred retirement accounts for 20 years, then I would think they’d have done very well compared to someone who had paid taxes every year on bonds or many mutual funds (with high turnover and/or high income).
Perhaps your parents’ friends would have done much better to pay taxes on their source income and invest in funds that were taxed annually. But I wonder if their current opinions are biased by the immediate negative of current taxes on past gains, and they are losing sight of the large tax benefits they reaped years ago.
This reminds me of homeowners who bought in 1987 or 1996, whose homes went up by $1 million, and who complain sincerely about the financial burden of their home, because the prices have gone down by $100,000 in the last year. All they see is the $100,000 loss, forgetting the prior $1 million gain and the huge net benefit.
Patient renter in OC
December 13, 2007 at 8:21 PM #116737patientrenterParticipant“Have you ever met someone in their 70ies now who have remotely complained about contributing too much on a retirement account and are now getting taxed up the ars now? Just curious.”
flu, no, I haven’t met anyone in the situation you describe. (I’m in no way claiming that they don’t exist. I just don’t know any.) If a person has accumulated money in a tax-deferred retirement accounts for 20 years, then I would think they’d have done very well compared to someone who had paid taxes every year on bonds or many mutual funds (with high turnover and/or high income).
Perhaps your parents’ friends would have done much better to pay taxes on their source income and invest in funds that were taxed annually. But I wonder if their current opinions are biased by the immediate negative of current taxes on past gains, and they are losing sight of the large tax benefits they reaped years ago.
This reminds me of homeowners who bought in 1987 or 1996, whose homes went up by $1 million, and who complain sincerely about the financial burden of their home, because the prices have gone down by $100,000 in the last year. All they see is the $100,000 loss, forgetting the prior $1 million gain and the huge net benefit.
Patient renter in OC
December 13, 2007 at 8:21 PM #116779patientrenterParticipant“Have you ever met someone in their 70ies now who have remotely complained about contributing too much on a retirement account and are now getting taxed up the ars now? Just curious.”
flu, no, I haven’t met anyone in the situation you describe. (I’m in no way claiming that they don’t exist. I just don’t know any.) If a person has accumulated money in a tax-deferred retirement accounts for 20 years, then I would think they’d have done very well compared to someone who had paid taxes every year on bonds or many mutual funds (with high turnover and/or high income).
Perhaps your parents’ friends would have done much better to pay taxes on their source income and invest in funds that were taxed annually. But I wonder if their current opinions are biased by the immediate negative of current taxes on past gains, and they are losing sight of the large tax benefits they reaped years ago.
This reminds me of homeowners who bought in 1987 or 1996, whose homes went up by $1 million, and who complain sincerely about the financial burden of their home, because the prices have gone down by $100,000 in the last year. All they see is the $100,000 loss, forgetting the prior $1 million gain and the huge net benefit.
Patient renter in OC
December 13, 2007 at 8:21 PM #116794patientrenterParticipant“Have you ever met someone in their 70ies now who have remotely complained about contributing too much on a retirement account and are now getting taxed up the ars now? Just curious.”
flu, no, I haven’t met anyone in the situation you describe. (I’m in no way claiming that they don’t exist. I just don’t know any.) If a person has accumulated money in a tax-deferred retirement accounts for 20 years, then I would think they’d have done very well compared to someone who had paid taxes every year on bonds or many mutual funds (with high turnover and/or high income).
Perhaps your parents’ friends would have done much better to pay taxes on their source income and invest in funds that were taxed annually. But I wonder if their current opinions are biased by the immediate negative of current taxes on past gains, and they are losing sight of the large tax benefits they reaped years ago.
This reminds me of homeowners who bought in 1987 or 1996, whose homes went up by $1 million, and who complain sincerely about the financial burden of their home, because the prices have gone down by $100,000 in the last year. All they see is the $100,000 loss, forgetting the prior $1 million gain and the huge net benefit.
Patient renter in OC
December 13, 2007 at 8:23 PM #116578michaelParticipantYou can save cash in your 401k also, except at a much faster rate…
Lets see, you earn $1000. For simplicity, lets assume a 25% federal tax bracket. You are left with $750 to put in your cash savings account. The account earns, let’s say, 4% or $30 (annualized). Since it is not a tax deffered account you owe $7.50 in taxes, leaving you $22.50 in earned interest and a total of $772.50
If you would have left the money in the 401k you would have $1000 (pretax contribution). In this example the employer is contributing 25% or $250. You now have $1,250. This account also earns 4%. 4% x $1,250 = $50. The account is tax deffered so I don’t have to pay taxes and I can keep my $50 of interest for a total of $1,300.
401k plans do suck!
December 13, 2007 at 8:23 PM #116711michaelParticipantYou can save cash in your 401k also, except at a much faster rate…
Lets see, you earn $1000. For simplicity, lets assume a 25% federal tax bracket. You are left with $750 to put in your cash savings account. The account earns, let’s say, 4% or $30 (annualized). Since it is not a tax deffered account you owe $7.50 in taxes, leaving you $22.50 in earned interest and a total of $772.50
If you would have left the money in the 401k you would have $1000 (pretax contribution). In this example the employer is contributing 25% or $250. You now have $1,250. This account also earns 4%. 4% x $1,250 = $50. The account is tax deffered so I don’t have to pay taxes and I can keep my $50 of interest for a total of $1,300.
401k plans do suck!
December 13, 2007 at 8:23 PM #116742michaelParticipantYou can save cash in your 401k also, except at a much faster rate…
Lets see, you earn $1000. For simplicity, lets assume a 25% federal tax bracket. You are left with $750 to put in your cash savings account. The account earns, let’s say, 4% or $30 (annualized). Since it is not a tax deffered account you owe $7.50 in taxes, leaving you $22.50 in earned interest and a total of $772.50
If you would have left the money in the 401k you would have $1000 (pretax contribution). In this example the employer is contributing 25% or $250. You now have $1,250. This account also earns 4%. 4% x $1,250 = $50. The account is tax deffered so I don’t have to pay taxes and I can keep my $50 of interest for a total of $1,300.
401k plans do suck!
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